The Reserve Bank of Australia has decided to keep official interest rates on hold at 4.75% for another month.
In its media release, the Reserve Bank governor stated that inflation was likely to remain within its longer term target range of 2 to 3 per cent, despite the huge floods in recent months. The higher Australian dollar was also helping contain costs by making imports cheaper.
Further Mr Stevens noted that whilst natural disasters over the summer have reduced output, but production levels should recover over the months ahead, and there will be a mild boost to demand from the rebuilding efforts as they get under way.
Today’s rate announcement was widely expected with many economists predicting no movement until mid-year and then a couple of rate rises for the rest of the year.
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